By notice of motion filed November 8, 2012, under motion sequence two, plaintiff, Rossrock Fund II LP (Rossrock) has moved for among other things, an order appointing a referee to compute the amount due. The motion is unopposed.

On January 11, 2008, Rossrock commenced the instant action to foreclose on a real property located at 388 East 34th Street, block number 4904 and lot number 33 (hereinafter the subject property). Bryan Cumberbatch (Cumberbatch) was the owner of the subject property and Rossrock's debtor on a note securing the subject property.

This is Rossrock's fourth motion for the same relief. By order of the court dated January 26, 2009, the first motion for an order of reference was denied due to an improper non-military affidavit. By order dated February 23, 2011, the second application was denied based on the submission of a stipulation between the Rossrock and the court appointed receiver. That stipulation stated that Rossrock had received a deed-in-lieu of foreclosure for the subject property. The Court learned for the first time of a deed-in-lieu of foreclosure, which begged the question of whether foreclosure was still appropriate.

By decision and order dated July 20, 2012, Rossrock's third application was denied because the motion failed to comply with CPLR 2221(d). The Court directed, that should Rossrock choose to move again for the same relief, it was to explain the terms of the agreement and the consideration offered and accepted between Rossrock and Cumberbatch that yielded a deed in lieu of foreclosure. Rossrock was also directed to explain its connection to RR REO LLC and under what circumstances RR REO LLC received the deed to the subject property. Finally Rossrock was directed to explain several apparent discrepancies related to the signatures in the deed-in-lieu of foreclosure agreement.

The instant motion attempts to address those discrepancies through the affidavit of James H. Ross, the Vice President of Rossrock dated October 23, 2012. His affidavit states that on November 4, 2010, Cumberbatch and Rossrock entered into a deed-in-lieu of foreclosure agreement. In consideration for the deed, Rossrock forgave the debt, released Cumberbatch from all liability, and gave Cumberbatch $25,000.00. In exchange Cumberbatch, as directed by Rossrock, gave all rights, title and interest to the subject property to RR REO LLC, an affiliate of Rossrock.

Furthermore, Rossrock has included an "affidavit of merit" from Wilhelmina M. Esteves, the notary whose stamp appeared on blank pages of the prior motion. She explained that the placement was a simple error. The Court accepts her plausible [*2]explanation.

Rossrock posits that because the deed vested in RR REO II LLC, that it did not merge with the mortgage and therefore Rossrock is still entitled to foreclose upon the subject property. It is established that the doctrine of merger is not favored in equity, it applies only where the greater estate, the fee, and the lesser estate, the mortgage, are in one and the same person, at one and the same time and in one and the same right. As these and other cases hold, the issue of merger turns on the intent of the parties as demonstrated by their actions (Alden Hotel Co. v Kanin, 88 Misc 2d 546 [N.Y.Sup. 1976] [internal citations omitted].

The Court need not determine whether merger occurred by the deed-in-lieu of foreclosure transaction. There is no dispute that Cumberbatch no longer has an ownership interest in the property nor any indebtedness to Rossrock. However, under the terms of the agreement wherein Cumberbatch's interest was transferred to RR REO LLC, that entity became a necessary party to a foreclosure action pursuant to RPAPL 1311.

In as much as it has not yet been made a party, the motion is denied

Enter:

J.S.C.